The Factors Affecting on Non-Performing Loans in Selected Branches of Sepah Bank

Abstract

The banking system in Iran has always been faced by non-performing loans. Non-performing loans have many consequences such as the lack of liquidity and reduction in the volume of credits in Iran’s banking system. Based on the importance and the role of the non-performing loans in the banking system, this study investigates the impact of some banking and economic factors affecting on them in various branches of Sepah Bank in the framework of panel data in the period of 2004-2014. The results indicate that banking variable such as total facilities, risk index, and bank size and the economic variable such as loans interest rate and inflation rate have a positive and significant effect on the non-performing loans of Sepah Bank while economic growth has a negative and significant effect.

Keywords

• Non-Performing Loans
• Panel data
• Sepah Bank